PAOLI, Pa., May 06, 2020 (GLOBE NEWSWIRE) — Malvern Bancorp, Inc. (NASDAQ: MLVF) (the “Company”), the parent company of Malvern Bank, National Association (“Malvern” or the “Bank”), today reported operating results for the second fiscal quarter ended March 31, 2020.   Net income amounted to $1.9 million, or $0.25 per fully diluted common share, compared with net income of $2.0 million, or $0.26 per fully diluted common share, for the quarter ended March 31, 2019. Annualized return on average assets (“ROAA”) was 0.61 percent for the quarter ended March 31, 2020, compared to 0.70 percent for the quarter ended March 31, 2019, and annualized return on average equity (“ROAE”) was 5.29 percent for the quarter ended March 31, 2020, compared with 5.74 percent for the quarter ended March 31, 2019.
For the six months ended March 31, 2020, net income amounted to $2.7 million, or $0.35 per fully diluted common share, compared with net income of $4.0 million, or $0.52 per fully diluted common share, for the six months ended March 31, 2019. The annualized ROAA was 0.44 percent for the six months ended March 31, 2020, compared to 0.72 percent for the six months ended March 31, 2019, and annualized ROAE was 3.74 percent for the six months ended March 31, 2020, compared with 5.87 percent for the six months ended March 31, 2019.  COVID-19 Response EffortsThe Company has taken significant steps to protect the health and well-being of its employees and clients and to assist clients who have been impacted by the COVID-19 pandemic.In mid-March, all Financial Centers began operating on an amended hours schedule or by appointment and we began further utilizing our drive through services, with increased safety measures.In mid-March, we implemented a work-from-home policy for employees who are able to do so and began providing guidance on hygiene and social distancing.We are encouraging clients to utilize the Bank’s electronic banking services, including online and mobile banking, telephone banking, as well as night drops and ATMs.We have been proactive in our outreach to our clients and have offered hardship assistance, including participation in Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) programs.We are assisting new and existing customers as an active participant in the Paycheck Protection Program (“PPP”).We are also providing payment deferrals and forbearances to consumers and business customers that are experiencing hardship because of the crisis.Impact of COVID-19In March 2020, Congress passed the CARES Act, which is designed to provide relief to individuals and businesses following the unprecedented impact of the COVID-19 pandemic. The CARES Act includes approximately $2 trillion in assistance and a key component is the PPP, which provides 100% federally guaranteed  Small Business Administration (“SBA”) loans for small businesses to cover up to eight weeks of payroll costs to retain their workforce and assist with mortgage interest, rent and utilities. Notably, these small business loans may be forgiven if borrowers maintain their payrolls and satisfy certain other conditions during the eight-week period as defined in the SBA guidance.In response to the economic hardships associated with the COVID-19 pandemic, as of April 30, 2020, the Company has obtained approval from the SBA for 172 loans totaling $17.1 million for both existing and new customers, with an average loan size of approximately $99,000.  The Company also assisted another 10 small businesses representing $3.2 million through referral to an intermediary consultant who sourced the loans to another SBA lending institution.  These efforts assisted local small businesses to retain an estimated 1,769 employees. The Company is continually monitoring the PPP and making the necessary adjustments to its own operations.In addition, Section 4013 of the CARES Act, “Temporary Relief from Troubled Debt Restructurings (“TDRs”),” allows banks to temporarily suspend certain requirements under GAAP related to TDRs for a limited period of time to account for the effects of COVID-19.  A bank may elect to account for modifications on certain loans under Section 4013 of the CARES Act or, if a loan modification is not eligible under Section 4013, a bank may use the criteria in the COVID-19 guidance to determine when a loan modification is not a TDR.The Bank began providing financial hardship relief in the form of payment deferrals and forbearances to customers and business customers across several lending products, as well as suspension of home foreclosures. Many of the Company’s customers have been required to close pursuant to governmental restrictions on nonessential businesses, and we expect they will suffer significant cash flow issues. As of April 30, 2020, the Company entered into 136 loan modification agreements with respect to approximately 29% of loans outstanding. We are dedicated to supporting our clients and communities throughout this period of uncertainty.  The payment deferrals and forbearances are currently expected to cover periods of three months.  These offers are not classified as TDRs and do not result in loans being placed on nonaccrual status. These modifications are on-going and we expect more deferrals to be granted in the third fiscal quarter 2020.“I am very proud of the Malvern team’s performance in responding to the COVID-19 health crisis.  Our initial response has been to take important steps to mitigate the potential spread of the virus, while continuing to serve our clients and keep them and our employees safe during these challenging times.  We believe our responsiveness to new and existing customers and our strong capital position will enable us to weather this unprecedented storm.  Despite these unusual times, I am pleased with our second fiscal quarter operating results, especially our continued improvement of the balance sheet and our emphasis on building client relationships, measured loan growth and strong capital levels,” commented Anthony C. Weagley, President and Chief Executive Officer.Joseph D. Gangemi, Chief Financial Officer of the Company, added: “The Bank has taken steps to reduce the cost of funds through reductions in deposit rates, and in higher cost borrowings, as well as with derivative transactions.  We believe these strategies taken throughout the quarter will serve to improve the net interest margin in the coming quarters.”
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